Creditors receive Detroit's preliminary debt plan

Thursday

Jan 30, 2014 at 12:01 AMJan 30, 2014 at 11:05 AM

DETROIT - The state-appointed emergency manager overseeing Detroit's finances gave the bankrupt city's creditors his plan to restructure the debt yesterday, though it could be modified before being reviewed by a court.

DETROIT — The state-appointed emergency manager overseeing Detroit’s finances gave the bankrupt city’s creditors his plan to restructure the debt yesterday, though it could be modified before being reviewed by a court.

Details of the plan were not released publicly. In a written statement to the media, Emergency Manager Kevyn Orr said the plan of adjustment outlines how much each class of creditors would receive for claims submitted in bankruptcy court.

The plan is expected to be filed with the court in about two weeks, Orr said.

He said the plan “offers the most effective and efficient way for Detroit to resolve its numerous issues.” He originally had said the plan would be released in late December but moved that back as mediation continued with city unions, banks, a group representing retirees, and other creditors.

“There is much work still to do and we believe the proposed plan provides the roadmap for all parties to resolve all outstanding issues and facilitate the city’s efforts to achieve long-term financial health,” said Orr, who was appointed in March to fix Detroit’s finances. The city’s bankruptcy is the largest municipal bankruptcy in U.S. history.

Experts have said the debt-restructuring plan likely will bear some similarities to a June 14 report laid out to creditors. Orr then placed Detroit’s debt at $18 billion or more, including $3.5 billion in unfunded pension liabilities and $5.7 billion in unfunded retiree health-care obligations.